Can A Medigap Plan Really Save You Money?

The whole idea behind Medicare Supplement Insurance, also known as Medigap, is to help Medicare beneficiaries reduce their out-of-pocket costs and produce long-term health care savings.

So can a Medigap plan actually save you money? And if so, how and how much? Read on to learn more, and visit MedicareSupplement.com or call 855-508-0919 today to compare plans for free, with no obligation to enroll.

Survey says: Medigap saves money

A 2023 Medigap Satisfaction Study conducted by AHIP found:

• 87% of Medigap beneficiaries either strongly (58%) or somewhat (29%) agreed that their plan saved them thousands of dollars in out-of-pocket costs.
• 85% of beneficiaries were either extremely (68%) or somewhat (17%) satisfied with the savings their policy delivered.
• 91% of beneficiaries said they would be extremely (71%) or somewhat (20%) concerned about losing their financial security if they were unable to receive Medigap insurance.¹

The survey numbers certainly support the notion that Medigap indeed saves people money. Let’s crunch some other numbers to see how.

There are over 13 million hospitalizations among U.S. adults aged 65 and over every year.² When you are admitted to the hospital with Medicare, you must meet the $1,600 Part A deductible per benefit period in 2023 before Medicare begins to cover any charges.

Six of the 10 available Medigap plans in most states cover this hospital deductible in full. Another two plans cover 50% of the deductible, and one plan covers 75% of the cost.

The average monthly premium for Medigap Plan N for a 65 year-old beneficiary was just over $110 per month in 2023, or roughly $1,321 per year. Plan N covers the hospital deductible in full.

If you were admitted to the hospital with Plan N, you might spend over a thousand dollars per year in Medigap premiums but would pay nothing toward the charged Medicare hospital deductible. Without Medigap, you would pay nothing in annual Medigap premiums but would be responsible for the $1,600 deductible.

Just in that example alone, your annual Medicare savings with a Medigap plan would be $279.

Let’s look at another example.

When you see a doctor for an outpatient appointment, Medicare Part B pays for 80% of the bill and leaves you responsible for the remaining 20% as a coinsurance payment. A hip replacement surgery performed at an outpatient facility cost a Medicare beneficiary an average of $1,860 in coinsurance in 2023.³

The average cost of Medigap Plan G for a 65 year-old beneficiary is around $135 per month, or about $1,620 per year. Plan G will cover the 20% coinsurance charge in full.

So if you have a hip replacement with Medigap Plan G, you might pay around $1,600 per year in Medigap premiums but will not have to pay any Medicare coinsurance for the procedure. Without Medigap, you won’t pay anything in Medigap premiums but will have to pay out of pocket for Medicare coinsurance when you have the surgery.

In this example, Medigap Plan G could save an average Medicare beneficiary $240 for the year with just this single use of the plan.

Questions about Medigap and which plan may be right for you? Visit MedicareSupplement.com or call 855-508-0919 to connect with a licensed insurance agent.

Medigap provides more predictable spending

The burden of Medicare’s out-of-pocket costs are not just how much you might have to spend, but the unpredictable nature of when you have to spend it.

It’s impossible to predict how much health care you will need to utilize in any given year. Injuries and illnesses can happen at any time. Without a Medigap plan, you leave yourself open to unexpected and unpredictable health care costs that can upend your finances in a moment’s notice.

With Medigap, your out-of-pocket Medicare charges are greatly reduced. That allows you to better forecast your health care spending for the year and cut down on those surprise medical bills.

In fact, 91% of the respondents to the AHIP survey either strongly (64%) or somewhat (27%) agreed that their Medigap plan protected them from unexpected and unpredictable medical costs.

Learn more about how Medigap can save you money

Visit MedicareSupplement.com to contact a Medicare licensed insurance agent and learn more about how a Medigap plan can save you money.

An agent can answer any lingering questions you may still have about Medigap insurance and help you compare plans to determine the best option for your needs.

Visit MedicareSupplement.com or call 855-508-0919 today to request your free Medigap plan quote or to connect with a licensed insurance agent.

¹AHIP and Global Strategy Group. (Feb 10, 2023). Seniors’ Satisfaction with their Medicare Supplemental Insurance Coverage. .www.ahip.org/documents/AHIP-Medicare-Supplemental-Survey-Analysis-D02.08.22.pdf.

²Fang Z, Owens P. (Apr 5, 2022). Statistical Brief #293. www.ncbi.nlm.nih.gov/books/NBK580470.

³Medicare.gov Procedure Price Lookup tool, accessed Sep 8, 2023. www.medicare.gov/procedure-price-lookup/cost/27130.

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